When You Should (and Should NOT) Use Points for Hotel Stays

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Million Mile Secrets reader John commented:

How do you find out if a hotel is worth staying at with points?  And how do you find such great deals?  What time of the year are the rates more expensive?  It seems like every hotel is different.  I am interested in only Hyatt hotels and Starwood hotels.

John can get Big Travel with Small Money by using points to stay at pricey hotels.  Most hotels use a fixed award chart so John pays the same amount of points all year.

But other hotels like Starwood use a variable chart.  So John will pay a different rate depending on when he books.

John can quickly find award nights at Hyatt and Starwood hotels by using sites like Hotel Hustle and AwardMapper.

And I’ll explain when John might want to save his points and pay with his credit card instead!

When It’s Worth Using Points for a Hotel Stay

John should redeem points for hotel stays during the summer and holidays and at fancy hotels when paid stays are expensive.

For example, 1 night at the Park Hyatt Maldives Hadahaa can cost ~$1,571!

But the same night only costs 30,000 Hyatt points!

Where he has a choice between top-tier Hyatt and Starwood hotels, John should use Hyatt points instead of Starwood points.

That’s because he pays less points – only 30,000 Hyatt points a night instead of 30,000 to 35,000 Starwood points a night for the most expensive hotels!  And there are many ways John can get Hyatt points!

However, Starwood points can be a fantastic bargain at inexpensive hotels where weekend nights are only 2,000 Starwood points.

Now’s a great time for John to use his Hyatt points.  That’s because John can get a 20% rebate when he redeems points by July 31, 2015, if he has the Hyatt card!  He could use his Hyatt points at my favorite Hyatt hotels, 1 from our dream list, or at any Hyatt hotel worldwide.   

Remember, you can transfer Chase Ultimate Rewards points to Hyatt at a 1:1 ratio.  So you can turn your 30,000 Chase Ultimate Rewards points into 30,000 Hyatt points to book a night at the Park Hyatt Maldives Hadahaa to save ~$1,571.

Folks who use Chase Ultimate Rewards points for a regular statement credit get 1 cent back per point.  So they get $300 for their 30,000 Chase Ultimate Rewards points.  But John can get a hotel room that costs $1,571!  That’s Big Travel with Small Money! 

John can read my Starwood series on the best uses of Starwood points.

When It’s NOT Worth Using Points for Hotel Stays

But John should NOT use points for hotels if he’s saving them for a higher value redemption.

He should do the math to find the cash price of hotel divided by the number of Starwood points to get the room.  Then compare it to hotels he wants to stay at in the future.  That way, John can decide where he’d rather spend his points.

For example, 1 night at the Westin Denver Downtown costs ~$292.  So John gets a value of ~2.9 cents per point (~$292 cash price of the hotel / 10,000 Starwood points to get the room).

John would get more value using 10,00 Starwood points to stay 1 night at the Sheraton Mountain Vista Villas instead of paying ~$563! So John would get a value of ~5.6 cents per point (~$563 / 10,000 Starwood points).

Or, he can use points if he doesn’t want to pay cash at all.

Keep in mind that Starwood points can be hard to earn without sign-up bonuses from the Starwood AMEX (personal) or (business) cards.

If John doesn’t have enough Starwood points, John’s partner or friends can use their Starwood points to book a room for him.

How to Find the Best Hotel Deals Using Points

Link:   Hotel Hustle

Link:   My review of Hotel Hustle

Link:   AwardMapper

Link:   My review of AwardMapper

As with airline award tickets, John should book award nights when he knows his travel plans.  Although there are no blackout dates for Hyatt or Starwood award stays, if he waits too long, the hotel could be sold out!

There are free resources like Hotel Hustle and AwardMapper to help John find available award nights at hotels like Hyatt and Starwood.  And Hotel Hustle will alert you if an award night you want becomes available.

Here are 3 ways to find the best deals on your own.  But you can take a shortcut!  I often post about great values.

In addition to the 2 lists I mentioned earlier (my favorite Hyatt hotels & our dream list), you can see photos (and in some cases videos) of hotels I’ve been to with Emily in our Trip Reports.

Here are a few hotels we’ve enjoyed with points:

• Candlewood Suites Toledo, Ohio
• Conrad Hong Kong
• Intercontinental Thalasso Bora Bora

1.   When It Costs Less to Use Points

As mentioned above, the best redemptions are when paid stays are expensive or cost more than using points.

John gets the most value from his points at lower category hotels.  Category 1 Starwood hotels costs 2,000 Starwood points a night (weekends) and 3,000 Starwood points (weekdays).  Whereas Category 1 Hyatt hotels cost 5,000 Hyatt points a night.

For example, John would pay ~$144 a night to stay at the Four Points by Sheraton Puntacana Village.

Whereas John could redeem 2,000 Starwood points for the same night.  And because John can buy Starwood points for 3.5 cents per point, it would cost $70 (3.5 cents per point x 2,000) to buy Starwood points – less than half the cost paying cash!

2.   Free Nights

Some hotels like Hilton, Marriott, and Starwood offer free nights when you redeem multiple consecutive nights.  John gets the 5th night free when he books 4 nights at Category 3 to 7 Starwood hotels.

So John can stay 5 nights at the Sheraton Waikiki for 80,000 Starwood points (20,000 points per night x 4 nights plus 5th night free).

But if he paid cash, it would cost ~$2,157!

3.   Cash & Points

John can stretch his points by using Cash & Points rates at Hilton, Hyatt, Marriott, and Starwood hotels.  So John can book award nights at expensive hotels using fewer points and less cash.

For example, John can redeem 15,000 Hyatt points and pay $300 cash for 1 night at the Park Hyatt New York.

While the same night would cost ~$1,062!

When Do Points Cost More

Link:   Hotel Award Charts

Some hotels like Hyatt have fixed award charts.  So John pays a set amount of Hyatt points for each category regardless of when he books his hotel.

For example, 1 night at any Category 4 Hyatt hotel costs 15,000 Hyatt points.  So John could book the Hyatt Regency Boston tonight for 15,000 Hyatt points.  Or he could reserve 5 months from now and still pay 15,000 Hyatt points.  And he pays the same amount of points for any Category 4 Hyatt hotel!

But other hotels like Hilton and Starwood use variable award charts.  So John pays more Starwood points to stay at Category 1 and Category 2 hotels on weekdays, and at Category 5 to Category 7 hotels on different dates.

For example, a Category 5 Starwood hotel costs 12,000 to 16,000 Starwood points a night depending on the date.  So 1 night at the Sheraton Princess Kaiulani in May will cost John 12,000 Starwood points a night.

While John will pay 16,000 Starwood points to stay at the same hotel in December!

Bottom Line

John will usually get the best value from his hotel points when redeeming points for expensive hotel stays.  Paid rates are normally higher during the summer and holidays so John should use points instead of cash to get the best value.

When hotel rates are low, using points still might be a good value.  Lower category hotels at some chains can cost 5,000 points a night or less!  But do the math 1st to see if it makes sense.

John can use sites like Hotel Hustle and AwardMapper to save time searching for hotels.  And with Hotel Hustle, you can set up alerts for when award nights become available.

Many hotels like Starwood offer discounts when you book multiple award nights.  And some like Hyatt also offer Points & Cash rates so John can save both points and cash on hotel stays.

However, John will pay more points at different times of the year at hotels like Starwood that use a variable award chart, instead of a fixed-rate award chart like Hyatt.

And by reading the blog, John will discover hotels that I highlight as being great deals!